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WORKBOOK — THE CORPORATE EXECUTIVE

Chapter I.07 · The Second Circle

For the person with a P&L, a signature limit, a board, and a quarter. This workbook uses the language of the firm without apology, because the firm's own numbers already support most of what follows — they have simply never been arranged to show it.

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THE PREMISE, STATED COMMERCIALLY

You are being asked to treat adoption as an engineering problem with a topology, not a communication problem with a budget.

Your organisation almost certainly funds change the way it funds marketing: reach, frequency, message quality. That spend is buying p — the coefficient of innovation, the rate at which people adopt from outside influence. Across 213 published diffusion applications the mean of p is 0.03 and the mean of q, the imitation coefficient, is 0.38. At those values, by the time adoption peaks, word of mouth has done 2.72 times the work your communication has.

You cannot buy q with media. q is a property of the network's shape, and the shape is something you can actually change — by who sits with whom, whose names go on which artifacts, and which groups you allow to grow past twelve.

Second point, stated for the balance sheet. Every initiative running on one person's attention is an unhedged single-point-of-failure exposure that appears nowhere in your risk register. It has a probability, it has a loss given event, and it has a hedge that costs about five thousand a year. That is this chapter's instrument.

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PART ONE — DISCOVERY

Days 1–30

Exercise 1.1 — Map the shape, not the sentiment (one week, with HR analytics)

Do not run a survey about enthusiasm. Run three queries.

1. Who is checked with. Pull whatever proxy you have for consultation — meeting co-attendance outside reporting lines, ticket reassignments, document comment graphs, calendar overlap between non-adjacent teams. You are not looking for influence in the marketing sense. You are looking for the person whose desk people stop at. Your best proxy is usually who is added to a meeting late.

2. Group sizes. List every standing group in the business unit with its headcount. Flag everything above twelve. At fifteen there are 105 pairwise channels and four minutes a head in an hour; those groups are presenting, not deciding, and everybody in them knows it.

3. The reinforced-member ratio of your current initiative. For each participant, count how many other participants they would contact directly, excluding you and excluding your direct reports. Divide the number with two or more by the total.

  circle of  6,  6 reinforced   100 %
  circle of 12,  8 reinforced    67 %
  circle of 12,  3 reinforced    25 %
  circle of 25,  5 reinforced    20 %

Below about 25 percent you have a star. Reach, attendance and awareness will all be rising; nothing will be propagating; and your reporting will be telling you the opposite of the truth. This is the single most important measurement in the workbook and it takes an afternoon.

Exercise 1.2 — The appreciative leadership conversation (one session)

Before proposing anything, change one question in one meeting.

Replace "how do we get buy-in?" with:

"Name a practice that spread through this business without a mandate. Who was the second person to take it up, and what made them credible to the third?"

Record what comes back, and record it as a structure — names and relationships — not as an anecdote. You are assembling evidence that the organisation already knows how to do this, which is a far easier argument than that it must learn.

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PART TWO — THE ARITHMETIC

Days 31–45

Exercise 2.1 — The threshold map for your top thirty (one week)

Take the thirty people whose participation would materially change the outcome. Beside each, your honest estimate of their threshold: how many peers would have to be visibly doing this before they would?

Sort. Look for the gap.

You will be wrong about individuals and right about the shape. The shape is what you need, because of this:

  circle A   0  1  2  3  4  5  6  7  8  9 10 11     mean 5.500  ->  12 of 12
  circle B   0  2  2  2  2  2  2  2  2  2  2 11     mean 2.583  ->   1 of 12

Circle B is more than twice as eager on average and it never moves. Your engagement survey measures the mean. The mean is the wrong statistic and it can point the wrong way. Ten of B's twelve members need only two others; there is no route from one to two; the whole group waits forever.

Write the output as one sentence for the board paper: the constraint is not support, it is the absence of anybody at threshold two, and the intervention is one named person.

Exercise 2.2 — Price the founder risk (half a day, with your controller)

This is the number that turns a working group into a signed instrument.

  median employee tenure (use your own; BLS Jan 2024 median is 3.9 yr)
  implied constant hazard  =  ln 2 / median          0.1777 / yr
  P(founder's attention gone within 3 years)         41.3 %

  cost to re-found this initiative from zero        150,000
  expected loss per year  =  0.413 x 150,000 / 3     20,663
  charter cost = 2 owners x 2 h/mo x 12 x 65 + 2,000  5,120
  ---------------------------------------------------------
  cover ratio                                          4.04 x

Substitute your own tenure figure and your own re-founding cost. The conclusion is insensitive: the charter clears at any founder-loss probability above roughly 10 percent.

State the assumption in the paper rather than hoping nobody asks. A constant hazard from a median overstates late-service departures and understates year one, and "attention moving" is broader than "leaving" — both of which make the estimate conservative in the direction that matters.

Exercise 2.3 — The sensitivity that protects you (2 hours)

Run three cases — your estimate, and your estimate with the re-founding cost and the departure probability each moved 30 percent against you. Publish all three.

At a 30 percent adverse move on both, the charter still clears at roughly 2×. An analysis that survives a double adverse move is very difficult to attack, and the executive who brings all three unprompted is trusted with larger questions afterwards.

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PART THREE — DESIGN

Days 46–60: the instrument

Exercise 3.1 — Choose the second and third owners against criteria (two weeks)

Not volunteers. Not the enthusiastic. Four criteria, in order.

1. They are checked with. From Exercise 1.1, query one.
2. Their threshold is low but not zero. A person at zero is another innovator; their support carries no information because it was available without the evidence. You want one and two.
3. They are visible to each other. If they are not, your first month's work is introduction, not recruitment.
4. They have standing at risk. Participation costing nothing signals nothing.

One of the three should sit in a different cost centre from you. That is what makes the charter a two-party agreement rather than an internal memo, and it is what makes the funding survive your reorganisation.

Exercise 3.2 — Draft the two-party charter (one week)

A small joint operating agreement between two cost centres, with one defining feature: no drawdown on a single signature.

The vacancy clause is the clever part and it costs nothing. It converts succession planning from a thing everyone agrees with into a thing that has a deadline.

Exercise 3.3 — Take it to the controller, not the director (one meeting)

The director agrees in principle and forgets. The controller sets up the allocation and the thing exists.

Arrive with the allocation basis already drafted and the accounting treatment already decided: contributed time expensed in both cost centres on the agreed basis, unless the circle produces an identifiable asset — a tool, a documented process, a dataset — in which case the ordinary internally-generated-intangible recognition tests apply. Most circles fail the reliable-measurement test in year one and that is correct. Do not capitalise a culture. Capitalise a deliverable.

The meeting is ten minutes.

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PART FOUR — DESTINY AND DELIGHT

Days 61–90

Exercise 4.1 — Manufacture the tie (one month)

Put your second and third owners on a real piece of shared work, with both names on the output, and do not attend.

This is not team-building. It is the mechanism. Until they have a working relationship that does not route through you, the reinforced-member ratio stays where it is and nothing can propagate. Measure it again at the end of the month; if it has not moved, the work was not real enough.

Exercise 4.2 — Publish the split rule before you need it (one meeting)

"At fourteen people this circle divides into two, each keeping the charter, and the two owners decide the division."

State it while the group is at six and nobody has anything to lose. Every group that has torn itself apart over growth tore itself apart over a rule it wrote too late.

Exercise 4.3 — Deliberately miss a meeting (one hour, of nothing)

In the last month of the ninety days, be absent from one meeting without delegating, without a pre-brief, and without reading the notes until the following day.

What comes back is your measurement. A decision was made, or it was deferred to you. If it was deferred, you know exactly what remains to be built, and you have learned it while it is still cheap.

Exercise 4.4 — Design the delight (ongoing)

A circle people want to be in recruits itself; a circle that is merely correct requires your continued attention, which is the thing this chapter exists to stop needing. One good hour, one good room, one ritual worth having. This is not soft. It is the adoption mechanism, and it is the cheapest line in the charter.

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THE FAILURE MODES, NAMED

So you can see them coming

The star. You recruited everyone privately, one conversation at a time. Every metric improves; nothing spreads; adoption among the spokes is structurally zero at any size. Diagnosed by the reinforced-member ratio, repaired by introduction.

The enthusiast trap. Your second and third people were the two who agreed first. They are other innovators, their support carries no information to observers, and the early majority is watching the wrong signal. Diagnosed by asking three uninvolved people whose opinion they would check on this.

Widening instead of splitting. The circle is at eighteen and someone has proposed a facilitator. Coordination cost is rising as n² while reinforcement rises as n. SDS went from a few hundred members in 1962 to roughly a hundred thousand by 1969 and disintegrated at one convention. Split.

Silent succession. The successor is named and has never chaired anything. The handover will fail on the day, because the network was never rewired. Diagnosed by Exercise 4.3 and repaired only by time.

The renewing entitlement. The charter rolled over without a re-signature and is now a budget line nobody defends and nobody cancels. The sunset clause exists for this.

The compatibility failure, which is the most common of all. The practice is correct, the evidence is good, and it does not fit the working life of the person you are offering it to. Rogers' Peruvian water-boiling campaign had a resident health worker, repeated home visits and a true claim, and reached 11 of 200 households in two years — 5.5 percent. Diagnosed by watching somebody perform the practice for a full shift rather than by asking them about it, and repaired by changing the practice rather than the argument for it. If your adoption is stuck and the network shape is sound, this is where to look next, and it is the one failure mode that no amount of structure will fix.

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THE NINETY DAYS ON ONE PAGE

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BOARD PAPER TEMPLATE

One page. Five headings. No appendix.

1. The exposure. This initiative currently depends on one person's attention. Median tenure here is X years, implying a Y percent probability that dependency crystallises within the term. Re-founding cost is £Z.
2. The hedge. A two-party charter naming four people, with joint-signature drawdown and a sixty-day vacancy clause. Annual cost £A. Cover ratio B×.
3. Why not simply communicate more. Across 213 published diffusion studies, imitation does 2.72 times the work of outside influence by the time adoption peaks. Media buys the smaller coefficient. Structure buys the larger one.
4. The measurement. Reinforced-member ratio, monthly, on the standing pack. Target above 50 percent. Current figure: C percent.
5. The decision. Approve the charter and the split rule. Nothing else is sought.

Give it to the person who controls the next allocation. One page, one person, one number — the cover ratio.

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APPRECIATIVE QUESTIONS FOR YOUR LEADERSHIP TEAM

1. Name a practice that spread through this business without a mandate. Who was second, and what made them credible to the third?
2. Which of our standing groups makes decisions genuinely well? What is its size, and what does it have written down that the others do not?
3. Where in this organisation do two people from different cost centres already work well together without being told to? What made that possible?
4. If every initiative here had four named people instead of one, what would we stop losing?
5. What would we put on the standing pack that would tell us a month early that something had quietly become one person's project again?